U.S. tariff refunds hit $71 billion as inflation pressures blunt relief

U.S. tariff refunds reached about $71 billion after the Supreme Court struck down tariffs imposed under IEEPA in February, forcing the government to repay a large share of the import taxes it had collected. With $166 billion in refunds set to be paid in total and domestic manufacturing up just 1.1% year over year as of June, the administration is now leaning more heavily on other trade authorities, notably Section 301 of the Trade Act of 1974, to keep tariffs in place. That shift is set to show up later this month in new 25% tariffs on many imports from Brazil, following a yearlong Office of the U.S. Trade Representative investigation that found unfair trade practices. The move follows earlier tariffs totaling 50% on certain Brazilian imports after Brazil’s former president, Jair Bolsonaro, was accused of leading a conspiracy to overturn his 2022 reelection loss. Bolsonaro was later sentenced to 27 years in prison. Businesses are still receiving rebate cash tied to last year’s import taxes, but many companies say the benefit is being diluted by higher commodity, shipping and energy costs. PepsiCo and McCormick have said tariff refunds are helping absorb inflation rather than fully easing prices for consumers. Analysts and trade specialists say Section 301 offers a slower but more durable path for tariffs than IEEPA or the temporary Section 122 surcharge, though it could still face legal challenges and prolong planning uncertainty for importers.